Investors snapped up euro stocks in December

The strongest investment in European stocks in over three years brought a rush of money into the euro zone in December, European…

The strongest investment in European stocks in over three years brought a rush of money into the euro zone in December, European Central Bank data released today showed.

This healthy appetite for euro zone stocks helps explain the euro's surge to a record high at $1.3667 at the close of 2004.

But analysts said the buying spree probably reflected not so much new-found confidence by investors in the economic strength of the 12-nation currency bloc, but rather their desire to limit exposure to a falling US dollar.

Foreign investors snapped up €28.9 billion worth of equity securities in the euro zone in December, the ECB said in its monthly balance of payments report.

At the same time, euro area residents sold €11.2 billion worth of foreign stocks, bringing net inflows into equity securities in December to €40 billion.

For all of 2004, net investment in euro zone equities totalled €61.9 billion, up 24 per cent from the prior year.

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